August 21, 2012 / 3:01 AM / 5 years ago

Australia's QNI nickel refinery turns to loss

COOLUM, Australia, Aug 21 (Reuters) - Australia's QNI nickel refinery showed a loss in the first months of fiscal year 2013 after posting a modest profit in 2012, Cliver Palmer, chairman of privately held Mineralogy Ltd, said on Tuesday.

The turnaround comes as the price of nickel, linked to demand for stainless steel, has been among the worst performing metals on the London Metals Exchange, losing about 17 percent since the start of the year.

"Nickel production up to July was probably showing a small loss after making a modest profit for the year," Palmer said.

Earlier, refinery officials told Reuters the facility in eastern Australia would yield around 32,000 tonnes of nickel metal this year, steady on 2012.

While the refinery held the capability to produce as much as 70,000 tonnes of metal per year, Mineralogy was not yet prepared to go to that limit, officials said.

Mineralogy has commissioned construction of a fleet of panamax size freighters to haul ore to the refinery from New Caledonia, Indonesia and the Philippines.

Palmer also said Mineralogy expected to start receiving royalties that could reach as much as $500 million per year starting in November when its Australian iron ore mine is scheduled to start production under a deal with Chinese steelmaker Citic Pacific. (Reporting by James Regan; Editing by Ed Davies)

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